The Reserve Bank of India (RBI) on Wednesday finalised the threshold for upper layer non-banking financial companies (NBFC-UL) as entities with an asset size of ₹1,00,000 crore and above.
Though the central bank did not disclose the final NBFC-UL list, Tata Sons is expected to be considered as an upper layer NBFC since the RBI is yet to take a final decision on the company’s request for cancellation of its registration. Tata Sons was placed in the NBFC-UL list in September 2022 and was expected to complete the listing process by September 2025.The RBI also said that “the asset size for identifying NBFC-UL shall be as evidenced in the audited balance sheet of the company on a standalone basis, prepared as per applicable accounting standards.” It was responding to a proposal which sought clarification on the specific components to be included in the computation of “asset size” for NBFC-UL categorisation. While Tata Sons’ FY26 annual report is yet to be made public, the holding company’s standalone balance sheet size, as of March 2025, stood at ₹1.75 lakh crore.
The RBI shot down a suggestion to consider setting the threshold at least at ₹2,50,000 crore or higher with complementary objective metrics of profitability and asset quality, for identification of NBFCs in the Upper Layer.
In response to this, the RBI said: “The asset size threshold of ₹1,00,000 crore and above has been decided on the basis of current profile of NBFC sector and also on analysis of financial profile of existing NBFC-UL. Further, in view of the growth trend of the sector, the periodicity for review of the asset size threshold is reduced from five years to three years.”
In a major decision, the central bank also said that eligible government NBFCs will be included in NBFC-UL in view of their interconnectedness with the financial system and in pursuance of the principle of ownership-neutral regulatory regime for NBFCs.
Hence, it has been decided to increase the LEF limits for the group of connected counterparties of NBFC-IFC in Upper Layer from 35% to 45% of the eligible capital base. This was being done “considering the specialized nature of NBFC-IFC, the needs of the infrastructure sector and to avoid adverse impact on existing infrastructure projects,” the RBI said.
